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Paid Parental Leave is on the way - what do Irish employers need to know?

With the Summer break just around the corner, the question of childcare is at the forefront of many parents' minds, and so too the issue of parental leave entitlement.

The concept of parental leave is not new and has been provided for under Irish legislation for over 20 years. Against the backdrop of a proposed EU Directive on improving work life balance, there have been a number of important legislative proposals in Ireland focusing on family leave in the past two years:

Firstly, a private member's bill, (the Parental Leave (Amendment) Bill 2017 (the 2017 Bill)), which proposes increasing the parental leave entitlement from 18 weeks to 26 weeks per child up until the child is 12 (rather than eight). The 2017 Bill is at final stages of the Seanad.

Secondly, this month the Government published the General Scheme of its Parental Leave and Benefit Bill 2019 (the 2019 Bill) which introduces paid parental leave for employees in Ireland for the first time this November.

The Government has approved the priority drafting of the necessary legislation to introduce the 2019 Bill later this year.

So what does this mean for employers when it comes to managing parental leave requests from employees – and how much will it cost?

What are the current parental leave entitlements?

As detailed in our previous client alerter in June 2018, the Parental Leave Acts 1998 and 2006 entitle parents of children up to eight years, or up to 16 years if the child has a disability or long term illness, to 18 working weeks' unpaid parental leave per child. This also applies to people acting in loco parentis where they have legal responsibility for a child. To be entitled to this, the employee generally has to have completed one year's continuous employment with their current employer.

The current legislation entitles parents to take parental leave in one continuous "'block" of 18 working weeks, or two separate blocks. At the discretion of the employer, the parental leave entitlement can be taken in other forms broken down over days or even hours. An employer is also entitled to postpone any application for parental leave for up to six months if granting such leave at that point in time would have a "substantial adverse effect on the operation" of the employer's business.

Both parents have an equal separate entitlement to parental leave and this entitlement can only be transferred from one parent to another. This only applies where both parents work for the same employer and the employer agrees to such a transfer. Any such transfer is capped at 14 working weeks.

Although parental leave is unpaid, taking such leave will not affect other employment rights and entitlements. For instance, an employee on parental leave will continue to accrue service and statutory annual leave and public holiday entitlement as normal.

What do the new Bills propose?

The 2017 Bill

The 2017 Bill proposes to increase the parental leave entitlement by an additional eight weeks (i.e. 26 working weeks' parental leave per parent). Any parents who have already exceeded their current entitlement (18 weeks) will be entitled to an additional eight weeks' unpaid parental leave if the Bill is enacted.

The new Bill also intends to increase the eligibility age of children from eight years to 12 years.

The 2019 Bill

Building on existing statutory entitlements to paid maternity and paternity leave, the 2019 Bill introduces the concept of paid parental leave for employees in Ireland for the first time. Subject to PRSI contributions, as of November 2019, during the first year of a child's life both parents will have access to two weeks parental leave. This will be paid by the State at the same rate as the current State Maternity Benefit (€245 per week) – i.e. the Parental Benefit. It is proposed that this Parental Benefit will gradually increase to seven weeks paid parental leave over the next three years. Similar to the situation of State Maternity and Paternity Benefit, it will be up to individual employers to determine whether or not to "top up" the Parental Benefit amount.

The 2019 Bill envisages parents taking the paid parental leave in blocks of "not less than one week" and that parents availing of additional maternity or adoptive leave may take their portion of paid parental leave beforehand.

What should employers be doing?

The operational aspects of parental leave entitlement are unchanged by the new bills. This includes an employee's one year prior service requirement and the processing of applications for parental leave. Employers are advised to engage and consult with employees on such applications, in particular where an employer intends to postpone the granting of such leave.

Parental leave policies will need to be updated to reflect the new enhancements when the bills are enacted and accurate records of all applications should be maintained. The 2019 Bill proposes that such records should be maintained for eight years after the parental leave is taken and envisages class B fines for failure to keep such records. The emphasis on accurate record-keeping is further underlined in the General Scheme of the 2019 Bill, which envisages the Workplace Relations Commission prosecuting such offences. There is also scope for the "prosecutor's" costs and expenses "reasonably incurred in relation to the investigation, detection and prosecution of the offence" to be awarded.

Conclusion

The Minister for Employment Affairs and Social Protection has commented that the fact the Parental Benefit will be non-transferable and available to parents on a 'use it or lose it' basis will help "incentivise fathers to take more time off work to care for their children". The Minister also expressed a hope that encouraging fathers to take such time off will "contribute to changing the existing culture regarding work and gender".

These comments reflect the evolving workplace landscape, with recent shifts towards mandatory gender pay gap reporting and a draft EU directive focused on work-life balance bringing the question of family leave firmly into the spotlight. By introducing a longer entitlement to parental leave until children are older, alongside the 2019 Bill's promise of two weeks of such leave being paid by the State, the legislative proposals seek to incentivise more men (in particular) to avail of at least some of their parental leave entitlement.

Key themes, including promoting the "participation of women in the labour market" and "making it easier for men to share the responsibilities of caring for children" are expressly called out within the General Scheme of the 2019 Bill. The 2019 Bill envisages that such priorities are to be balanced and should not impose an "undue burden on employers". Despite concerns being raised by employer representative bodies around the cost and impact, of facilitating such leave, paid parental leave is on the way before the year is out.